Entercom Communications Corporation owns and operates radio stations in 26 United States media markets. The company was founded in 1968 and is based in Bala Cynwyd, Pennsylvania.
ETM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Entercom Communications Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Entercom Communications Corp ranked in the 37th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 30.33%. In terms of the factors that were most noteworthy in this DCF analysis for ETM, they are:
Interest coverage, a measure of earnings relative to interest payments, is -3.07; that's higher than only 10.27% of US stocks in the Consumer Cyclical sector that have positive free cash flow.
10% of the company's capital comes from equity, which is greater than only 3.78% of stocks in our cash flow based forecasting set.
Entercom Communications Corp's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than only 0% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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Shares of Entercom Communications (NYSE: ETM) are soaring in morning trading after the radio broadcaster said its chairman emeritus had scooped up 1.2 million shares of the company's outstanding stock at prices ranging from $1.20 to $1.45 per share. Insider buys are often perceived by the market as bullish signals, and the purchases by Joseph Field amounted to approximately 1% of Entercom's float. Field now owns approximately 11% of the broadcaster's outstanding stock, or about 15.1 million shares.
Thank you, Missy, and welcome to Entercom's first-quarter earnings conference call. During this call, the company may make forward-looking statements, which are based upon the company's current expectations and involve risks and uncertainties. The company's actual results could differ materially from those projected in these forward-looking statements.